The healthcare environment post-Affordable Care Act is changing the way that physicians practice and the way that they are compensated for patient care services. With the change from fee-based to value-based reimbursement comes significant stress related to needed change in processes and procedures, as well as the potential for a reemergence of some "traditional risk" categories. Physicians nee...

A consortium of employers and managed health care organizations has come together to test the feasibility and usefulness of an outcomes management system, a new strategy for providing information on what types of medical care are effective, for whom, and under what circumstances. Systematic measurement of health outcomes can provide the information that patients, providers, and insurers/employe...

This paper measures welfare losses caused by adverse selection and imperfect competition in privatized Medicare. I model insurers’ premium and coverage choices in an environment where consumers with heterogeneous preferences may impose di¤erent costs on their insurers. Using insurers’ behavior and exogenous variation in market structure, I identify a causal link between consumers’types and insu...

The purpose of this paper is to characterize the impact of fraud detection systems on the auditing procedure and the equilibrium insurance contract, when a policyholder can report a loss that never occurred. Insurers can only detect fraudulent claims through a costly audit (costly state verification). With fraud detection system insurers can depend their audit on the signal of the system and au...

This article analyzes tort liability litigation costs using the Texas Department of Insurance Commercial Liability Insurance Closed Claim database for the years 1988–2004. Insurer costs to defend claims in which a suit was filed average $35,000 per claim in 2004$, which corresponds to a share of 0.18 of total expenditures. Claims with higher stakes and complexity lead to greater reliance on out...